Problem 1.15 Suppose the stock price is $40 and the effective annual interest rate is 8%. (a) Draw the payoff diagrams on the same window for the options below. (b) Draw the profit diagrams on the same window for the options below. (i) A one year 35-strike put with a premium of $1.53. (ii) A one year 40-strike put with a premium of $3.26. (iii) A one year 45-strike put with a premium of $5.75. Problem 1 16